How to Ignite the Second Electrical Revolution

Posted by Elisa Wood on April 12, 2012

Elisa Wood.

The electric industry is good at building things. That’s how it solves problems. Is there a threat of blackouts? Develop a new natural gas-fired plant. Worried about climate change? Build wind and solar power. Does electricity cost too much? Install a transmission line to import cheaper power.

But build-to-solve represents only half of the equation in the new world of smart grid. The other half, the part that stumps the industry, is solve-without-building.

Rather than adding more energy, smart grid tries to wring maximum efficiency out of the system by changing the way we consume electricity. But it turns out, trying to direct human energy behavior makes cat herding look easy. To get people to pay attention to their energy use, utilities and private companies are experimenting with alluring gadgets and social motivators. So far, success has been minimal. Thomas Edison’s light bulb has been such a smashing success for the last 100 years, none of us want to turn it off.

Consumer motivation has become a common conference topic. But Pink’s talk was different. He stepped back and took a broader view and asked: How do we motivate the people who are trying motivate the consumer? Pink calls this “the science of how people do extraordinary things.”

The power industry’s creative thinkers need to bust out of their intellectual silos to ignite the “second electrical revolution,” according to Pink. But smart grid represents a particularly difficult problem for them because the industry is trying to invent gadgets consumers are not demanding. The electric grid needs the gadgets and needs consumers to use them. But consumers would rather think about their next iTunes download or where to buy the tastiest strawberry. How do you get consumers to want a smart plug or home energy display just as much? Some in the industry say smart grid is doomed because it not born of household demand but of the power industry’s need.

Pink has another view. He asked members of the audience to raise their hands if they own an iPad. Half did. Then he asked how many of them knew they needed one two years ago. Only one hand went up.

Therein lines Apple’s genius; its ability to give the world something it didn’t know it was missing. Can the power industry do the same with smart grid? It must first recognize that this is a skill more likely to be found in artists than engineers. “I think the cognitive skills of artists today are the most important cognitive skills in the economy,” Pink said. “We need scientist that think like artists and artists that think like scientists.”

The electric industry also needs to reconsider the way it motivates creative employees. “It turns out a lot our intuitions about motivation are not quite right,” according to Pink. In fact, it’s downright “Newtonian” to assume that “when you reward behavior you get more of it, and when you punish behavior you get less of it.”

So forget the big bonus for the genius idea. While people need to be paid reasonably to perform well, big bonuses only motivate them to achieve short-term goals, like making a sales quota. “Igniting the second electrical revolution is not simple, is not short-term, but is complex and long term,” he said.

So what gets creative thinkers moving? Free time, as Pink tells it. He cited studies and examples of artists doing their best work without a commission and inventors achieving Nobel Prize-winning work off the clock. The business community is beginning to catch on to this idea, and some are offering a regular day when their inventors and problem solvers are encouraged to stop their required tasks and just work on anything that intrigues them. Many of these free hours have produced astonishing findings, some that the companies have been unable to achieve any other way.

“Complex industries, likes yours, complex ecosystems demand this kind of complex, silo-busting thinking. You’re going to get it, not through an elaborate system of incentives, but by hiring talented people and getting out of their way,” he said.

Perhaps, if Pink is right, and the electric industry listens, he’ll be able ask audiences in a few years how many own some amazing energy-saving device that no one has yet conceived, and many hands will fly into the air. Perhaps then the light bulb, as we know it, will finally be replaced.

Elisa Wood is a long-time energy writer whose work appears in many of the industry’s top magazines and newsletters. A correspondent for McGraw-Hill/Platts Energy for two decades, Wood writes for Electric Power Daily, the Energy Economist, Electric Utility Week and other Platts publications.

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